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July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL)

Canadian Natural Resources Limited (CNRL) · Jul 14, 2017 · 48 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 1
  2. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 2
    Delivering Value and Growth SNAPSHOT 2016 2017F Capital expenditures ? net (C$ million) $3,794 $4,095 Current annualized dividend (C$/Share) $1.10 Production (annual average, before royalties) Oil (Mbbl/d) 524 649 - 709 Natural gas…
  3. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 3
    Natural gas NYMEX (US$/MMbtu) $2.45 $3.41 Natural gas AECO (C$/GJ) $1.98 $3.06 Heavy oil diff (%) 32% 29% Exchange rate (C$ = XUS$) $0.75 $0.76 Company Gross Reserves, before royalties, of crude oil and natural gas (as at December…
  4. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 4
    Canadian Natural?s Strengths ? Proven, effective strategy ? Flexible capital allocation ? Nimble to capture opportunities ?Balanced cash flow allocation ?Cultural advantage ? Strong operations ? Effective, efficient and reliable…
  5. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 5
    ? Flexible capital allocation to maximize value ? Strong Balance Sheet to support investment grade credit ? Defined growth/value enhancement plans by product/basin ? Diverse, balanced asset base ?Product mix ? Project timelines ?…
  6. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 6
    Balance & Optimize the Four Pillars of Cash Flow Allocation Maximizing Shareholder Value Balance Sheet Strength Returns to Shareholders Economic Resource Development Opportunistic Acquisitions FLEXIBLE CAPITAL ALLOCATION…
  7. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 7
    Significant portion of portfolio long-life, low decline ? Provides robust, sustainable cash flow ?Low reserve replacement risk ? Facilitates capital flexibility to maximize returns ? Strong inventory of low capital exposure projects…
  8. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 8
    North America North Sea Offshore Africa ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing, sustainable cash flow BUILDING A WORLD CLASS COMPANY Balanced, Diverse…
  9. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 9
    0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 SIGNIFICANT VALUE TO UNLOCK 1P Reserves After Royalties Note: Pro forma - CNQ Includes 70% ownership in AOSP. Sourced from 2016 corporate reports. Peers include: APA, APC, CVE,…
  10. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 10
    Canadian Natural?s Advantage Impact of Long-Life Assets on Decline Rates Production levels maintained 9.1% Note: Conventional Assets include North America crude oil and NGLs, International crude oil and NGLs and natural gas. Assumes…
  11. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 11
    Delivering Safety Excellence Corporate total recordable injury frequency (incident per 200,000 hours) 2010 2011 2012 2013 2014 2015 2016 ? Safety is a core value 19.4% 11.7% 9.1% ? Committed to continuous improvement ? No harm to…
  12. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 12
    Environmental Performance Corporate GHG Emissions Intensity (tonnes CO 0.075 0.070 0.065 0.060 0.055 2 e/BOE) 16% Overall Reduction 2012-2016 2012 2013 2014 2015 2016 ? Proactive environmentally responsible operations ?…
  13. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 13
    Leveraging Technology to Create Value & Enhance Performance Research & Development Investment ($ million) $600 $500 $400 $300 $200 $100 $0 2009 2010 2011 2012 2013 2014 2015 2016 Note: Sourced from Company internal reports.…
  14. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 14
    Athabasca Oil Sands Project Acquisition ? Acquisition closed May 31, 2017 ? 70% operated working interest in the Athabasca Oil Sands Project (?AOSP?) Mines ? Ownership share equal to 196,000 bbl/d of mined bitumen capability ? Total…
  15. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 15
    Canadian Natural 2017 Capital Budget HIGHLY ACCRETIVE ACQUISITION ($ million) 2016 2017F* North America natural gas & NGLs $277 $460 North America crude oil* 512 920 International crude oil 477 420 Total Exploration and Production…
  16. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 16
    Canadian Natural 2017 Production Forecast Targeted Production 2016 2017F % Change Natural Gas (MMcf/d) 1,691 1,700 - 1,760 2% Crude Oil & NGLs (Mbbl/d) North America (2) 240 236 - 246 1% North America ? Thermal In Situ (2) 111…
  17. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 17
    4 Year Production Growth 1,350 1,250 1,150 1,050 950 850 750 Capital ($ Billion) Strip (2) (MBOE/d) STRATEGIC, DEFINED GROWTH PLAN 14 2016 2017F 2018F 2019F $3.8 $4.1 $4.7 $4.9 (1) 2016 midpoint to 2019F midpoint…
  18. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 18
    4 Year Free Cash Flow ($ Billion) $5 $4 $3 $2 $1 $0 -$1 Capital ($ Billion) 2016 2017F 2018F 2019F Strip pricing $3.8 $4.1* $4.7 $4.9 Note: Free cash flow represents cash flow from operations less capital and current dividends.…
  19. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 19
    Advantages of Infrastructure Ownership/Operatorship ? Control of our destiny ? Control costs, development timing and pace ? eliminates commitments ? Operations flexibility with high working interest ? Minimal capital exposure and…
  20. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 20
    Natural Gas & NGLs Core Area Summary BC West 1,143 MMcf/d CNQ Land Base AB SK MB Note: Reflects Q1/17 actual production, before royalties. NGL production included in light crude oil production volumes. East 470 MMcf/d 2017F…
  21. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 21
    $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Production Capability (Bcfe/d) STRONG PORTFOLIO OF LIQUIDS-RICH GAS PROJECTS Deep Basin/Montney Natural Gas Projects Return on Capital, 15% After Tax $2.00-$2.50 Tier 3…
  22. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 22
    North America Light Crude Oil Core Area Summary ? Q1/17 light crude oil and NGL production ? ~90 Mbbl/d ? 2P reserves ? 233 million barrels(1) ? High quality light crude oil horizontal multi-frac opportunities ? ~182 active…
  23. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 23
    Q1/17 light crude oil production ? ~46 Mbbl/d ? 2P reserves ? 386 million barrels(1) ? North Sea ? Operating efficiency gains and more favorable tax regime increase returns ? C?te d?Ivoire ? High return development opportunities…
  24. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 24
    Light Crude Oil Projects Return on Capital, 15% After Tax $45.00-$50.00 Tier 3 - Deep Basin $40.00-$45.00 Tier 2 ? Deep Basin $25.00-$40.00 Tier 1 ? Deep Basin, Espoir/Baobab $50.00-$60.00 Tier 4 - Southern Alberta WTI $0.00…
  25. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 25
    Primary Heavy Crude Oil Core Area Summary ? Largest primary heavy oil producer in Canada ? Q1/17 production of ~95 Mbbl/d ? Acquired Cliffdale asset ~8,400 bbl/d 2017F ? Large inventory of development opportunities ? Premium land…
  26. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 26
    Primary Heavy Crude Oil Projects Return on Capital, 15% After Tax Tier 1 Tier 2 Tier 3 Tier 4 0 20,000 40,000 60,000 80,000 100,000 120,000 WTI (US$/bbl) $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 Note: Assumes…
  27. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 27
    Industry leading EOR technology ? Capital requirements are reduced and polymer driven performance is realized ? Q1/17 production ~47 Mbbl/d ? Industry leading operating costs ? Q1/17 operating costs $6.37/bbl ? 2P reserves ? 384…
  28. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 28
    (bbl/d) 0 10,000 20,000 30,000 40,000 50,000 60,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Primary Polymerflood after Waterflood Polymer After Primary THREE PRODUCING REGIMES ? THREE…
  29. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 29
    Pelican Lake Projects Return on Capital, 15% After Tax WTI (US$/bbl) $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 0 5,000 10,000 15,000 20,000 Infill Drilling and Brownfield Polymer Expansions Tier 1 Tier 2 ?…
  30. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 30
    Q1/17 production volumes of ~128 Mbbl/d ? Acquired Carmon Creek asset ~5,400 bbl/d 2017F ? 2P reserves ? 2.52 billion barrels(1) ? Majority working interest and operatorship ? Effective and efficient thermal operator ? Leverage use…
  31. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 31
    ? Strong performance ? Quarterly production in Q1/17 ? ~37 Mbbl/d with an SOR of 2.7 ? 2P reserves ? 164 million barrels* Kirby North ? Reinitiated for development ? Major facility equipment purchased ? Lease delineated and ready…
  32. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 32
    Strong netbacks ? High quality crude oil ?Produced solution gas offsets fuel usage ? Significant development opportunities ? Steamflooding ?Follow-up process to CSS ? First commercial wells steamflood at Primrose East, Primrose…
  33. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 33
    Thermal In Situ Oil Sands Projects Return on Capital, 15% After Tax WTI (US$/bbl) $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 Primrose Pads Kirby North Wolf Lake Sparky Primrose Expansion Kirby South Pads - Tier…
  34. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 34
    AOSP Mines ~280,000 bbl/d of capacity ? Operating mines across river from Horizon ? Jackpine current ~126,000 dry bitumen ? Muskeg River current ~154,000 dry bitumen ? Uses paraffinic bitumen extraction technology ? IPL Corridor…
  35. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 35
    World Class asset ? 2P SCO reserves ? 3.60 billion barrels(1) ? Phased development (SCO) ? Phase 2B on stream ? Q1/17 production of ~192 Mbbl/d of SCO ? Targeted start-up of Phase 3 Q4/17 ? Potential 5,000 -15,000 bbl/d…
  36. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 36
    Peer Average (2013 - 2015) 80 82 84 86 88 90 92 94 96 2013 2014 2015 2016* 2017F BEST IN CLASS OPERATIONAL PERFORMANCE Horizon Oil Sands Industry Leading Utilization Rate Note: Peers include AOSP, Suncor, Syncrude. *2016…
  37. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 37
    Horizon Oil Sands Significant Operating Cost Reductions Production (bbl/d) 50,000 100,000 150,000 200,000 250,000 Annual Operating Cost (C$/bbl) $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 $45.00 Phase 3 80,000 bbl/d…
  38. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 38
    Horizon Potential Debottleneck ? Early indications show Phase 2B may exceed design rates ?Q4/16 ~178,000 bbl/d ?Q1/17 ~192,500 bbl/d ? 2017 budget includes a 24 day turnaround and tie-in of Phase 3 ? Preserve option for 2017 capital…
  39. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 39
    ? Strong financial position as of March 31, 2017 ? Debt/book capitalization 38% ? Available bank lines of $3.5 billion ? Disciplined allocation of capital delivers sustainable dividend policy ? 17 consecutive years of dividend…
  40. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 40
    Balance Sheet Improves Quickly Debt / Book Cap (%) Bank Covenant Note: For illustrative purposes all 2017F values are annualized figures, assuming the AOSP transaction occurred on January 1, 2017. Forecast - Mid-point of 2017…
  41. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 41
    Revolving bank line 1* (C$ million) $2,425 Maturity June 2019 Revolving bank line 2* $2,425 June 2020 Non-revolving syndicated term facility* $1,500 April 2018 Non-revolving term facilities* $ 875 February 2019 Operating demand loan…
  42. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 42
    Return to Shareholders 0 200 400 600 800 1,000 1,200 1,400 1,600 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F Dividend Share Purchase PSK Distribution Horizon Phase 1 build years ($ million) 23%…
  43. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 43
    Committed Management 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% CNQ PXD DVN EOG APC APA CVE ECA SU ? Substantial management and director wealth at stake ? Strong motivation for management to perform ? Delivers clear alignment with…
  44. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 44
    Strong balance sheet ? Large, diversified, well balanced asset base ? Transition to longer-life, low decline assets reduces capital requirements while maintaining production ? Delivering increasing and more sustainable cash flow to…
  45. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 45
    Key Historic Data Operational Information 2011 2012 2013 2014 2015 2016 Daily production, before royalties Crude oil and NGLs (Mbbl/d) 389 451 478 531 564 524 Natural gas (MMcf/d) 1,257 1,220 1,158 1,555 1,726 1,691 Barrels of oil…
  46. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 46
    Funds flow from operations 6,547 6,013 7,477 9,587 5,785 4,293 per share ? Basic 5.98 5.48 6.87 8.78 5.29 3.90 Net earnings (loss) 2,643 1,892 2,270 3,929 (637) (204) per share ? Basic 2.41 1.72 2.08 3.60 (0.58) (0.19) Capital…
  47. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 47
    May 31, 2017 Revised Q2/17 Revised 2017 Daily Production Volumes (before royalties) Natural gas (MMcf/d) 1,675 - 1,730 1,700 - 1,760 Crude oil and NGLs (Mbbl/d) North America(1) 227 - 235 236 - 246 North America ? Thermal In…
  48. July 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 48
    Total capital projects 1,055 Technology and Phase 4 15 Sustaining capital 415 Turnarounds and reclamation 135 Capitalized interest and other 90 Total Horizon Project 1,710 Total Athabasca Oil Sands Project - Sustaining Capital* 180…

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